LinkedIn denies wrong-doing, but will salt and hash all passwords going forward.

Further Reading

To settle a class-action lawsuit, LinkedIn has agreed to pay about $1 each to the roughly 800,000 people who were premium users between March 2006 and June 2012.

A LinkedIn premium user, Katie Szpyrka, sued the social network shortly after roughly 6.5 million hashed user passwords (and 1.5 million from a dating website) were published in June 2012. She alleged that the company was in violation of a number of California state laws, in breach of implied contracts, and was negligent, among other things.

A federal court in San Jose, California approved (PDF) the preliminary settlement which among other things, sets up a fund worth $1.25 million. Lawyers will take up to one-third of that amount, and after some administrative fees, the rest will be distributed to the individual plaintiffs. In the class-action settlement agreement, which was published (PDF) in August 2014, LinkedIn "continues to deny that it committed, or threatened, or attempted to commit any wrongful act or violation of law or duty alleged in the Action."

However, also as part of the settlement, the Silicon Valley firm has also agreed to "employ both salting and hashing, or an equivalent or greater form of protection in LinkedIn’s judgment, to protect LinkedIn users’ passwords for a period of five (5) years after the Final Settlement Date."

In a Monday statement provided to the New York Times, LinkedIn wrote: "Following the dismissal of every other claim associated with this lawsuit, LinkedIn has agreed to this settlement to avoid the distraction and expense of ongoing litigation."

Cyrus Farivar
Cyrus is a Senior Tech Policy Reporter at Ars Technica, and is also a radio producer and author. His latest book, Habeas Data, about the legal cases over the last 50 years that have had an outsized impact on surveillance and privacy law in America, is out now from Melville House. He is based in Oakland, California. Emailcyrus.farivar@arstechnica.com//Twitter@cfarivar